FMG - Fortescue Ltd

[luutzu]

...

I wonder why these analysts publish host of data to prove their point and change next day ? In the same newsletter for example, from Bull Weekly, I have noticed a scrip has been rated as buy, sell and hold by three different analysts....

It's called "plausible deniability", aka, azz covering.



Recently went to Intelligent Investor newsletter website and they promote how their recommendations have returned something like 17%p.a. since 2009, this compare the some 14%pa from an ASX index.

Nifty right?

But then during those same period they've made some 400 to 500 recommendations. Add to it the brokerage, tax, and you having enough time and cash but not enough common sense to listen to your own thinking and do as you're told... I don't think returns from their picks is anywhere near that 17%.

 

[Miner]

It's called "plausible deniability", aka, azz covering.



Recently went to Intelligent Investor newsletter website and they promote how their recommendations have returned something like 17%p.a. since 2009, this compare the some 14%pa from an ASX index.

Nifty right? 100%

But then during those same period they've made some 400 to 500 recommendations. Add to it the brokerage, tax, and you having enough time and cash but not enough common sense to listen to your own thinking and do as you're told... I don't think returns from their picks is anywhere near that 17%.

Agreed and felt better to see some one in agreement. Same Intelligent Investor called me offering a great discount I asked a simple question why you recommended TPI a buy a $1.17 when within two months it came down to mid eighty cents. Since then one year passed the share trader has never called me back. Another intelligent master is Kris Sayce. He keeps on sending junk mail at least five times saying how wonderful his stock recommendation are. Always why he is right and rest of the world are idiots.
Sorry folks nothing related to FMG but just got side tracked.
Coming to FMG since my restriction is over, I made a quick trade profit last week on FMG buying at $1.85 and selling at $2.15. I was not greedy to wait for long but needed some cash to recover AGO slowly

 

[Bris Vegas]

Has China's economy dropped below where it was 6 years ago yet?


I mean if a stock were $10 and you say its going down, then 6 years later it drops from $30 to $25, you can hardly claim you were right.

You need to read the Far Eastern Economic Review to see what is really happening in China. It is widely understood by economists that the Chinese government (like the former USSR) simply make up economic data. It has absolutely no factual basis.

 

[Value Collector]

It is widely understood by economists that the Chinese government (like the former USSR) simply make up economic data. It has absolutely no factual basis.

I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth.

The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.

I mean whether it's nails, screws, paper clips, cans, fridges, car parts, air conditioners, tv's, microwaves, farm equipment, shipping containers or whole ships etc etc, China is making them and shipping them around the world on a never ending conveyer belt. That consumes a lot of iron ore.

China also has over a billion people, supplying their needs as well as the needs of the industry above consumes a lot of steel every day.

This is what really counts, I have spoken before about the merits of Fmgs infrastructure and the low cost supply base of the Pilbara, the global demand for iron ore, and the pilbaras low cost supply, will see FMG and its low cost peers have sustainable long term businesses, whether China massages its numbers to turn a 5% into a 7% is irrelevant.

 

[stit]

I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth.

The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.

I mean whether it's nails, screws, paper clips, cans, fridges, car parts, air conditioners, tv's, microwaves, farm equipment, shipping containers or whole ships etc etc, China is making them and shipping them around the world on a never ending conveyer belt. That consumes a lot of iron ore.

China also has over a billion people, supplying their needs as well as the needs of the industry above consumes a lot of steel every day.

This is what really counts, I have spoken before about the merits of Fmgs infrastructure and the low cost supply base of the Pilbara, the global demand for iron ore, and the pilbaras low cost supply, will see FMG and its low cost peers have sustainable long term businesses, whether China massages its numbers to turn a 5% into a 7% is irrelevant.

http://www.hellenicshippingnews.com...small-bhp-output-deferral-ridiculous-russell/

Another article from a journo/analyst trying to justify their potential over bearish forecasts from less than a fortnight ago. His reasoning seems to be that the most recent price rally is ridiculous as its based on market sentiment - and i agree with him. The problem that I have with 99% of people writing these commentaries is that theyre happy to base their slim forecasts based on exactly that.........market sentiment on a future supply glut.

It now seems possible that the article I posted earlier this month suggesting that the market may actually be in deficit and a price correction to 60 - 70 per tonne may have some merit. It annoys me that no expert commenting on the matter does not seem to touch on simple mathematics - 1.6 tonnes of ore for 1 tonne of steel. China is expected to produce 800 million tones of steel for the next 10 years. That means they need 12 - 1300 tonnes per year. 4 majors currently produce a little over 1m - and thats just to supply china that consumes only 70% of seabourne ore. Nearly every other ore producer is making a loss at current prices below $60. No wonder the majors are not deterred on proceeding with expansions - but everybody seems to ignore that elephant in the room

 

[galumay]

I think that is a gross over statement,

Agreed, they might fudge, (who doesnt?), but to suggest that growth in China is a fiction is just silly.

The other thing that struck me as really odd was that its a first post, seems a very unlikley first post to a forum you have just joined. My cynical self wondered if it were not someone's ghost username they either logged in with by mistake or wanted to appear incognito?!

 

[stit]

Be careful with assumptions like that, the sort of biases that Klogg mentioned are in play!

http://www.bloomberg.com/news/artic...membership-privileges-are-worth-a-fortune-now

$63m in two days isn't bad if you can get it........................

 

[notting]

It annoys me that no expert commenting on the matter does not seem to touch on simple mathematics - 1.6 tonnes of ore for 1 tonne of steel. China is expected to produce 800 million tones of steel for the next 10 years.

According to your definition of sentiment that seems to fit into it.

 

[stit]

According to your definition of sentiment that seems to fit into it.

Sentiment and reality given that's what they're currently doing. Its a little different from some bullsh@t pie in the sky figure

 

[stit]

ok - so somebody - maybe the iron ore pessimists please steer me in the right direction.............and this kinda carries on from my former rants..........

http://www.smh.com.au/business/mini...t-for-the-iron-ore-price-20150428-1murdt.html


The above link has 8 predictions.............2 in the eight see ore above $60 and the rest see a glut...............


As i was saying previously china is currently producing 800m tonnes of steel per annum. As stated by previous posters this may not be the case in the future even though it is expected............ This requires 12 - 1300 m tonnes of iron ore currently. This represents 70% maximum of the global seabourne trade. That means that global seabourne trade is approximately 1700m tonnes. Currently the 4 majors produce a little over 1m tonnes. The four majors are the only producers making money under $60. Everybody else is hanging on by a wing and a prayer day to day. How does that represent a glut???? What am I missing that the experts are not???????????

 

[notting]

What am I missing that the experts are not???????????

Do you have difficulty reading or is it comprehension?

From your article -

We need to see demand-linked data improve (or at least stop getting worse) in the Chinese steel industry for us to gain any confidence in the current rally. Good volatility for traders, but no change in fundamentals," he said.

Goldman Sachs' analyst team led by Eugene King believes the iron ore landscape is scarcely changed by recent events, and the familiar dynamic of rising supply amid weak demand will quickly resume.
"We don't expect any of the major iron ore producers to alter plans. The capex has largely been spent and the internal rates of return of delivering the production into the infrastructure, even at sub-$US50-per-tonne prices, is very compelling," the analysts said.

The World Bank believes iron ore will lead declines among metals this year as the biggest producers in Australia and Brazil expand low-cost supplies further while demand remains weak.

Australia's richest woman, Gina Rinehart, last week said prices could be low for some time amid a supply glut.

"The ore price could be down for quite some time," according to Mrs Rinehart

 

[stit]

Do you have difficulty reading or is it comprehension?

From your article -

ummm - yeah maybe i have a comprehension problem - or maybe I'm missing your point.........that you didn't make. As I pointed out all of the articles see a downside because they can't see a fundamental change. The argument that i'm making that you obviously didn't read - and please correct me if I'm wrong, is that based on fundamental numbers it doesn't make sense to me

 

[notting]

There is too much supply not as much demand and the expected on going demand is as fanciful as any other figure.

Watching Andrew Forest and Jones crap on avoiding the fact that Vale is cranking up 18 billion dollars worth of infrastructure for pending IO supply.

Andrew made the point that Vale were there before BHP and RIO???!!!
Inferring Vale can't suddenly produce ship loads more to fill any hole that RIO and BHP might leave if they slow production, which is exactly what Vale is doing! Don't forget Gena.

Andrew Forest and Alan Jones are also going on about how much it is costing each Ausi in lost royalties throwing around figures like 60 Billion PA which is what RIO and BHP generate in revenue, not in profit and they are largely owned by international share holders. The royalties are in the single figure Billions.

Having said that, I think they'd be better off not expanding so fast and cutting back, which unfortunately will raise the cost of production so what ever the balance is it may not be that much more profitable in terms of margin gain.

Reality is that the boom is over.

"The Multinationals" as Andrew keeps refering to, rather than saying names because it's not true what Andrew is saying so he could be sued if he says lies naming a company, haven't said they are going to 'oversupply for years,' they have just said they are going to keep expanding.
The word, 'over' supply has not been used by the majors as Andrew is stating! Inferring BHP and RIO are trying to manipulate the market which is what he trying to do.

Oh and the morality of Andrews 'jobs card,' if you slow down production, how is that going to increase jobs?

One wonders if cash for comments is back on, through the back door.

 

[luutzu]

Maybe IO prices could be predicted by simply asking whether a high or a low price will hurt China.

Supply and demand is overrated.

Demand is always there... may not rise and grow at x percent, but it's there.
Supply is always there, or not there, depends on what the big 3 decides to do. And if you could shut down work, spend less cash but make more money, would you do it?

So in the short term we can speak of supply and demand, in the medium and long term it's geopolitics.

China is about to finish a couple of airstrips in the South China Sea, starting its own bank to take on the IMF/World Bank, making friends with most neighbours while slapping a couple around, extending work with Pakistan to create a "corridor" to the ME, it's getting friendlier with Russia...

It's unthinkable that such balls could go on unpunished.

How do you punish and weaken a nuclear armed power with 1.5 billion people and trillions of your corporations investment ties up with it? Economics... If you drop a bomb it's going to be nuclear armageddon; but if your corporations hike the price of imports it needs, that's free market and free trade.

Same result, only a few millions will be out of work and go hungry for a while. None of your people die.


China might be wiser and, I don't know, price their current projects to future prices or something... but who knows.

 

[Bris Vegas]

I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth.

The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.

I mean whether it's nails, screws, paper clips, cans, fridges, car parts, air conditioners, tv's, microwaves, farm equipment, shipping containers or whole ships etc etc, China is making them and shipping them around the world on a never ending conveyer belt. That consumes a lot of iron ore.

China also has over a billion people, supplying their needs as well as the needs of the industry above consumes a lot of steel every day.

This is what really counts, I have spoken before about the merits of Fmgs infrastructure and the low cost supply base of the Pilbara, the global demand for iron ore, and the pilbaras low cost supply, will see FMG and its low cost peers have sustainable long term businesses, whether China massages its numbers to turn a 5% into a 7% is irrelevant.

"I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth."

It is just a mirage. Selling junk below cost and building flashy apartments that nobody can afford is not a sound way to run an economy.

 

[galumay]

It is just a mirage.

Its not a mirage, a mirage is something that doesnt exist. No one seriously denies China's massive growth, they debate the % value, but not the reality of the economic growth. There are just so many obvious and observable impacts of their growth over the last 10 years.

 

[Value Collector]

"I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth."

It is just a mirage. Selling junk below cost and building flashy apartments that nobody can afford is not a sound way to run an economy.

I think you will find the shipping containers full of pretty much every type of manufactured product you can imagine that flow out of China are very real, it's not a mirage, sure they sell some junk, but a lot of it is high quality stuff, white goods, electronics, car parts etc brand name stuff, hell even the iPad I am typing this on was made there.

 

[Miner]

FMG researchers /punters
I just read in MF and surely many might also have read.
THis is their foolish bantor

" Is Fortescue Metals Group Limited set for a big fall?
Credit: glyphwalker
By Ryan Newman - April 30, 2015 | More on: BCIFMG


The iron ore price hike came to an abrupt halt overnight as the commodity shed roughly 4.6% to be trading at US$57.13 a tonne, according to figures from the Metal Bulletin Ltd.

Although I couldn’t see any news which wold specifically explain the sudden sharp pullback, it’s likely that the market may have begun questioning the sustainability of the commodity’s recent rise.

Prior to last night’s session, the iron ore price had enjoyed one of its strongest rallies in recent memory. Driven by Chinese stimulus, a rebounding oil price and signs of a cutback in supply expectations from BHP Billiton Limited (ASX: BHP), iron ore prices surged from a 10-year low of US$46.70 earlier in the month and maxed out at US$59.88 a tonne during Tuesday’s session, according to the Metal Bulletin.

However, the iron ore bears were back in force last night, selling the commodity down to US$57.13 a tonne. The sudden selloff will likely have investors on the back-foot again after many elected to invest in the sector in the hope of profiting from a huge rebound. In particular, Fortescue Metals Group Limited (ASX: FMG) and BC Iron Limited (ASX: BCI) have rallied hard and could be set for a significant pullback, especially if iron ore prices continue to dip over the next few sessions."

This could be a sales pitch inviting to buy their newsletter. Do not know if it is to entice potential members or to move market. This is in public domain as an advertisement so I am not breaching copy right .

 

[Klogg]

Do not know if it is to entice potential members or to move market. This is in public domain as an advertisement so I am not breaching copy right .

With the volume of FMG shares that are traded everyday, it's very hard to believe a newsletter aimed at retailer investors can move the FMG price.

May I ask why you believe this is foolish banter?

 

[skyQuake]

Article is just an overnight summary. FMG moving in lockstep to iron ore (as it should)

Green line = FMG
Red/White Bar = Iron ore futs (all sessions)